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Former WorldCom boss Bernie Ebbers knew the telco's books were being cooked but failed to do anything about it, former CFO Scott Sullivan testified yesterday.

In his third day in the witness stand Sullivan recounted how Ebbers kept saying that the company had to hit the financial projections expected by Wall Street. In response, Sullivan told Ebbers that they were "going to have to do something drastic if we were going to stay with our [financial] guidance".

Whenhe showed Ebbers the "short cuts" made to doctor books, the then chief exec asked about the changes and what effect it would have, Sullivan said.

The prosecution lawyer asked Sullivan: "Did Mr Ebbers tell you not to make the short-cut adjustment you had proposed?"

"No, he did not," replied Sullivan.

Knowing that the books had been altered to cover-up massive rises in expenses, Ebbers told an analyst conference: "If we look out for the remainder of 2001, we do not see any storms on the horizon at this time," Reuters reports.

A tape of that conference call was played in court.

Ebbers denies fraud charges relating to the financial collapse of WorldCom in 2002. Sullivan has already pleaded guilty to his part in the $11bn (£5.8bn) accounting scandal. ®